Reeves single-handedly saves grumpy Labor in epic first test – you won’t believe what happened!

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Good morning. How the Labor Party quarrel over benefits politics will unfold in the days and weeks to come, and what does it tell us about the internal state of the opposition? Some more thoughts on this in today’s note.

Simply a case of history repeating itself?

Rachel Reeves used her speech at the New Statesman’s summer reception to vigorously defend Labor’s benefits policy. She reminded the assembled audience of friendly lobbyists, party activists, shadow ministers and political journalists from a recent NS article by the magazine’s editor, Jason Cowley, who spoke of two Rachels: a creative Rachel and a cautious one.

Reeves’ speech was, essentially, a defense of cautious Rachel, the one who worries about Labor promises and their cost. It was, essentially, a not particularly coded way of saying “listen, you might not like that Labor pledged to maintain the cap on child protection payments, but you hated losing even more all these elections.

Then she did something that I found interesting. She said that without the “prudent Rachel”, the country would never benefit from the creativity of Bridget Phillipson, the shadow education secretary, or Wes Streeting, the shadow health secretary. And she praised the campaign work of Peter Kyle, the Northern Ireland shadow secretary, who is Labor’s point person in the Mid-Bedfordshire by-election.

What connects Phillipson, Streeting and Kyle is that they are all right wing and generally considered to be on the rise under Starmer.

Although Phillipson and Streeting have had their own tough battles with the Treasury shadow team over spending, all three are close allies of Reeves. As well as her official role as Labor’s shadow chancellor, she has another important unofficial role as the de facto leader of the Labor right.

The subtext here was a call for the right wing of Labor to rally behind the Starmer project (and especially for these purposes, the shadow chancellor) ahead of a shadow cabinet meeting later today which is expected to be quite hectic.

The backdrop to Reeves’ speech, which was rather more impactful than the largely supportive crowd might have expected, was a parliamentary Labor party meeting earlier in the day, which was variously described to me by its attendees as “tense”, “tense”. and “cranky”.

Not everyone who spoke out against Keir Starmer’s announcement that Labor will not scrap the two-child cap on child protection benefits was from the left of the party. Stella Creasy warned that the policy would cost more money in the long run, while Rosie Duffield, president of the Women’s PLP and single mother, also criticized the policy.

The silences were also significant. As Richard Burgon, Corbynite’s 2020 deputy leadership nominee, put it, opposition to the two-child limit unites “the left. . . and the not-so-left” of the Labor Party. (Another demonstration of this fact is that Anas Sarwar, the Scottish Labor leader and another right-wing figure in the party, announced that the aim of the Scottish Labor Party remained to abandon politics, which is devolved to the Scottish parliament . )

How will this line unfold? I think he will wear himself out, at least this side of the next election. It will be a big subplot of the Labor Party Conference this year, but if it is true to say that the opposition to the measure spans the length and breadth of the Labor Party, there is no no parliamentary flash point that will bring the dispute to a head. This will lead to heated meetings at the party’s national policy forum this weekend, where they presented the contents of Labour’s manifesto. But I don’t think disputes over lifting the two-child limit – an estimated £1.4billion change – are likely to erupt further before the election.

But after? This is an other story. The precedent that many Labor members talk about is the first rebellion by the New Labor government, over the single parent allowance.

Tony Blair and Gordon Brown had pledged to stick to Tory spending limits and as a result they had to implement drastic cuts to single parent benefits. The resulting rebellion in 1997 saw 61 Labor MPs break the party whip and resign from government. A veteran Labor hand remembers seeing MPs crying in divisive halls.

I do think, however, that there is quite a significant set of differences. One is procedural: MPs are simply more rebellious now and will continue to be. Although this policy caused a major dispute, the Labor government had a large enough majority to carry out a sizable rebellion. Just as importantly, this vote took place long before there was a digital version in Hansard, or a publicly available record of votes, or the various civil society projects that dealt with these things, as They work for you.

The second is economic: the last Labor government had, in economic terms, the best legacy an opposition has received from an outgoing government. The next . . .won’t. I do not mean to minimize the impact of Labour’s single parent benefit policy on the families affected, but it is one thing to stick to a tight spending regime in a booming economy, but that is is another in a sluggish economy.

In many ways, however, this is all just the first test for Labour. In addition to the rosy economic legacy Tony Blair inherited from John Major, he also inherited a fairly benign set of global and local factors. The UK population was younger, with less acute upward pressure on the NHS and social care. (Read this excellent article by William Wallis to learn more about the latter, also with this alarming table on the pressures faced by local authorities.)

As will, I imagine, be obvious, none of this is something Labor wants to discuss publicly this side of an election. It’s true to say – as some Labor MPs do – that this particular conversation could have been avoided with a more vague response from Starmer.

But when I look at the whole of the public realm – the pressures on university finances (the subject of the FT’s big read today), on the “jaws of fate” facing local authorities – I think Reeves will likely be forced to deliver many more rallying speeches this side of the election. If Rishi Sunak is lucky (or maybe he should be unlucky, given the circumstances), his path back to Downing Street may not be as narrow as I think.

Now try this

This week, I mostly listened to “In Dark Trees” by Brian Eno writing my column. This is a beautiful piece of haunting instrumental music, which I discovered while listening to the wonderful piece from Radio 3 Night tracks program.

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